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Kenseth Corporation_Journal and Adjusting Entries

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Question;Question 1;Kenseth Corporation?s unadjusted trial balance at December 1;2014, is presented below.;Debit;Credit;Cash;$26,760;Accounts;Receivable;36,780;Notes;Receivable;9,100;Interest;Receivable;?0?;Inventory;36,400;Prepaid;Insurance;3,870;Land;21,600;Buildings;153,000;Equipment;61,100;Patent;9,630;Allowance;for Doubtful Accounts;$570;Accumulated;Depreciation?Buildings;51,000;Accumulated Depreciation?Equipment;24,440;Accounts;Payable;28,200;Salaries and;Wages Payable;?0?;Notes;Payable (due April 30, 2015);11,600;Interest;Payable;?0?;Notes;Payable (due in 2020);35,620;Common Stock;57,300;Retained;Earnings;32,330;Dividends;12,800;Sales;Revenue;927,800;Interest;Revenue;?0?;Gain on;Disposal of Plant Assets;?0?;Bad Debt;Expense;?0?;Cost of;Goods Sold;634,500;Depreciation;Expense;?0?;Insurance;Expense;?0?;Interest;Expense;?0?;Other;Operating Expenses;61,220;Amortization;Expense;?0?;Salaries and;Wages Expense;102,100;Total;$1,168,860;$1,168,860;The following transactions occurred during December.;Dec. 2;Kenseth;purchased equipment for $17,400, plus sales taxes of $1,800 (all paid in;cash).;2;Kenseth sold;for $3,580 equipment which originally cost $4,900. Accumulated depreciation;on this equipment at January 1, 2014, was $1,990, 2014 depreciation prior;to the sale of equipment was $410.;15;Kenseth sold;for $5,070 on account inventory that cost $3,450.;23;Salaries and;wages of $6,450 were paid.;Adjustment data;1.;Kenseth;estimates that uncollectible accounts receivable at year-end are $3,910.;2.;The note;receivable is a one-year, 8% note dated April 1, 2014. No interest has been;recorded.;3.;The balance;in prepaid insurance represents payment of a $3,870, 6-month premium on;September 1, 2014.;4.;The building;is being depreciated using the straight-line method over 30 years. The;salvage value is $31,500.;5.;The;equipment owned prior to this year is being depreciated using the;straight-line method over 5 years. The salvage value is 10% of cost.;6.;The;equipment purchased on December 2, 2014, is being depreciated using the;straight-line method over 5 years, with a salvage value of $2,280.;7.;The patent;was acquired on January 1, 2014, and has a useful life of 9 years from that;date.;8.;Unpaid;salaries at December 31, 2014, total $2,090.;9.;Both the;short-term and long-term notes payable are dated January 1, 2014, and carry;a 10% interest rate. All interest is payable in the next 12 months.;10;Income tax;expense was $12,050. It was unpaid at December 31.

 

Paper#37415 | Written in 18-Jul-2015

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